Materials Down As Copper Nears 2-Year Lows – Materials Roundup
Producers of metals and other raw materials fell after weak U.S. economic data and fears about the outlook for Federal Reserve policy. Copper for September delivery fell 1.1% to $2.5575 a pound in New York, close to the lowest level since 2017.
Sometimes called “Dr. Copper” because of its ability to reflect the condition of the broad economy, the commodity is particularly sensitive to economic activity in China, the largest copper consumer. Speaking on CNBC, the leaders of both the Kansas City and Philadelphia Fed banks expressed skepticism about the efficacy of rate cuts at this stage in the economic cycle. Those comments, alongside cryptic minutes from the last central-bank meeting and weak manufacturing data in the U.S., caused traders to unwind bets that central-bank actions would save the world from recession.
“In our view, the minutes suggest that the [Fed] wants to keep its options open by continuing to stress that the economy is doing well, but the outlook continues to be clouded by significant risks,” said economists at brokerage Nomura Securities, in a note to clients. Shares of Chilean copper miner Antofagasta rose after it reported first-half profit growth as increased metals production offset weaker copper prices, which the company attributed to the trade war. Hog futures fell after U.S. export data showed no sign of sales to China.
Source: Dow Jones